Finding Text
Assistance Living Number 93.224 Health Center Programs
Grant Award Number H80CS00112
US Department of Health and Human Services
Finding 2021-005
Compliance Requirement: Allowable Cost/Cost Principles
Type of Finding: Material Weakness
Criteria: Uniform Guidance Allowable Costs/Cost Principles addresses activities related to payroll and personnel which should be supported by internal controls to ensure that employees working for the Organization have the proper documentation in personnel files to support employment activities. All personnel files should contain approved wage rates, I-9 forms, W-4 forms and applications or resumes.
Condition: A walkthrough of fourteen individuals was performed to agree personnel files and to payroll. Of the fourteen files reviewed, seven had no approved current pay rate documented, and the salary or hourly rate paid was not the rate contained in the file.
Cause: Management of the Organization’s human resources area turned over several times during the past few years, and personnel files were not prioritized to keep them in good order and in accordance with the Organization’s policy.
Effect: Without proper documentation, it is not possible to support the appropriate wage rate being paid to an individual, the proper amounts of withholdings, or even their eligibility for employment.
Questioned Costs: $330,000
Repeat Finding: Yes
Recommendation: Recommend use of a checklist within each file as an additional procedure to ensure that each file contains all necessary documents and that the file has been updated for current rates of pay.
Management’s Response: Management agrees with the recommendation and will implement the use of a checklist to improve compliance.